S&C Obtains Second Win in a Month for Volkswagen in Dispute with Prevent Group

December 7, 2021

Volkswagen AG obtained its second court victory in a month against the Prevent Group of automotive parts suppliers. On November 30, Judge Gershwin Drain of the U.S. District Court for the Eastern District of Michigan dismissed with prejudice all antitrust and business tort claims asserted in the second U.S. action filed against Volkswagen by a Prevent Group entity.
 
Earlier in the month, the U.S. Court of Appeals for the Sixth Circuit upheld the dismissal of an antitrust lawsuit brought by another Prevent Group entity against Volkswagen AG and Volkswagen Group of America. The plaintiff in that case accused Volkswagen of blocking Prevent Group's acquisitions of other suppliers in an effort to maintain a “monopsony” in the purchase of automotive parts.
 
In the litigation before Judge Drain, the plaintiff alleged that Volkswagen and others participated in a group boycott conspiracy to exclude it from the automotive seat cover market. Judge Drain held that these claims could and should be heard in Germany, and dismissed on the basis of forum non conveniens, following the Sixth Circuit's reasoning.
 
In a November 8 published opinion, a Sixth Circuit panel unanimously ruled that the case lacks a sufficient connection to the United States and does not belong in U.S. courts. In particular, the court stated that Germany provides an adequate alternative forum for Prevent Group's claims, even if it does not allow for treble damages. The court noted that Prevent Group companies had “already tried and largely failed to win on similar grounds” in German litigation.
 
The Sixth Circuit held that Sherman Act claims can be transferred to foreign jurisdictions, splitting from the Fifth Circuit and joining the Second Circuit. The ruling also marks the first time that the Sixth Circuit has affirmed dismissal of U.S. antitrust claims on forum non conveniens grounds.
 
The S&C team representing Volkswagen included Sharon Nelles (who argued the Sixth Circuit appeal), Steve Holley (who argued the motion to dismiss before Judge Drain), Suhana Han, Laura Kabler Oswell, Lenny Traps and Tim Weinstein.